Looking for something else

ANYTHING COMING? Yes, there’s a lot going on with Obamacare, and certainly the Senate has a full plate of President Donald Trump’s nominations to wind its way through.

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But if you were hoping the Senate had made some serious strides on a potential alternative to the House GOP’s destination-based cash flow tax — well, it sounds like they’re not there yet.

Senate Majority Whip John Cornyn (R-Texas) said his conference is looking for another path on tax reform, while stopping short of saying the House border adjustment proposal was dead. But as our Brian Faler reports, Cornyn didn’t want to get into a ton of detail. “There are people working on other approaches, because we definitely want to do tax reform,” Cornyn said, adding: “We’re still looking.”

Sen. Chuck Grassley (R-Iowa), a former Finance chairman, told reporters later in the day that there wasn’t much in the way of nitty-gritty to discuss. “I suppose the answer to that is yes, but not very specific at this point,” Grassley said, after being asked if the Senate GOP had an alternative cooking. “Because, under our Constitution, we can’t do anything until the House passes something. And we don’t even know if they have something together over there.”

AND WHERE’S THE ADMINISTRATION? It’s fair to say there’s not exactly a cohesive message about border adjustability coming out of 1600 Pennsylvania Avenue these days. Trump’s rhetoric — in both his joint address on Tuesday and elsewhere — has sounded in sync recently with the House GOP on border adjustability.

But at the very least, other senior administration officials continue to have their questions. CNBC’s John Harwood reported that Treasury Secretary Steven Mnuchin told Republicans on the Senate Banking Committee that he’s against the House GOP’s border proposal. Mnuchin has generally said, at least publicly, that Trump sees some positives and negatives about a border adjustment tax.

For his part, Sen. Tim Scott (R-S.C.) wasn't so sure that Mnuchin was outright opposed. “I had dinner with him on Monday night. I don’t know that he’s expressed skepticism on it. From my conversation with him on Monday, he did not appear to … rule it out,” Scott told our Colin Wilhelm, though the senator added that Mnuchin “absolutely did not” endorse it.“But there’s been a lot of conversations about, where is the actual position of the administration on border adjustability?” Scott continued, echoing comments from congressional Republicans who want clearer direction on tax reform, health care, and other pressing policy areas from the White House. “I’m not sure that has been clarified by the administration, certainly not by [National Economic Council Director] Gary Cohn, who I’ve spoken to, or Mnuchin as well. I think it’s still TBD, and a little work needs to be done.”

BLESSEDLY, IT IS FRIDAY. It’s also been 142 years since the first organized indoor hockey game, played in Montreal. (We’re guessing your Washington Capitals lost for the right to play that game.)

Looking ahead, Vice President Mike Pence and HHS Secretary Tom Price are heading to Speaker Paul Ryan’s hometown of Janesville, Wis., today to try and spur momentum for repeal and replace. As POLITICO’s Rachael Bade, Kyle Cheney and John Bresnahan report, that visit comes as GOP leaders are feeling increasingly confident they’ll get a health care measure through the House by month’s end — even if they have to ram it through over the chamber’s conservative flank. And finally, while Republicans continue to consider capping the exclusion for employer-provided health care in any replacement, House Ways and Means Chairman Kevin Brady said there were “about a dozen ways” that idea was different from Obamacare’s so-called Cadillac tax. (Other tax wonks might not agree with that, but some definitely believe that’s a preferable policy.)

WHAT’S UP, HERITAGE? Ryan, Brady, and a couple of White House officials broke bread with Heritage Foundation President Jim DeMint and other key Heritage players on Wednesday to discuss tax reform, Pro’s Transition 2017 team reports. (Sens. Rob Portman of Ohio and Pat Toomey of Pennsylvania were there, too.) The dinner shows that Heritage wants to make sure it can still be a key player on tax reform, and that it wants to help push Republicans away from the House GOP’s border adjustment framework. But: “Former Republican leadership aides and lobbyists don't think Heritage will ultimately have much influence or juice over tax reform, since the group is widely viewed on the Hill as disruptors who tend to complicate legislation rather than create a clear pathway for it, particularly in recent years,” Nancy Cook, Maggie Severns and Kelsey Tamborrino write.

ROUGH OUT THERE FOR TAX COLLECTORS: The recent leak that the Trump administration wants to cut the IRS’s budget by around 14 percent is interesting for a lot of reasons — but one of them is certainly that Mnuchin just recently, and very publicly, went to bat for the agency. But as The New York Times’ Alan Rappeport reports, that sort of helping hand might have been a step too far for a president who has regularly complained about how frequently he’s audited. Trump’s budget office is set to propose a $9.65 billion funding level for the next fiscal year, which would be around a 20 percent drop from the 2010 high of $12.1 billion.

It’s probably also notable that the big IRS news right now is about its funding, and not the fate of IRS Commissioner John Koskinen. (That’s the more enduring story anyway, as even Koskinen would acknowledge.) The IRS chief told Colin on Thursday that he’s yet to have any conversations with the administration about leaving before his term ends in November, even as some Republicans are calling on Trump to fire him. Koskinen said his main point remains that the White House needs to pick his replacement within the next couple months to make sure that person is in place by November.

An aside: Koskinen said Thursday he was on Capitol Hill to meet “with chairmen and ranking members about the tax policy agenda for the year, including comprehensive tax reform,” as Colin put it. For the record, Brady’s office says he was not one of those chairmen, which might have made for some chilly conversation given recent comments from the Texas Republican.

** A message from the Secure Family Coalition: 75 million families rely on the products and services that life insurance companies and their financial advisors provide. Protect the financial safety net as part of tax reform. Learn more at SecureFamily.org. **

NOT YOUR AVERAGE DAY IN PEORIA: Federal authorities descended on Caterpillar’s Illinois headquarters on Thursday as part of a broad investigation into the manufacturer’s tax history, the Peoria Journal Star reported. It wasn’t a secret that Caterpillar was under investigation — the company said as much in its most recent annual filing with the SEC. The inquiry appears to stem from a lawsuit settled back in 2012 that accused Caterpillar of using offshore shenanigans — particularly Bermuda and Switzerland structures — to avoid more than $2 billion in taxes. A search warrant executed Thursday said investigators wanted any documents that discussed moving products between the U.S. and Switzerland.

Not an average day for Caterpillar investors either: The stock took a pretty big dip, as Bloomberg reported.

INTERNATIONAL UPDATE —

NEW FRONTIER FOR THE SODA TAX: South Africa will join the ranks of governments implementing a sugary drink tax in April, becoming the first African country with that sort of tax, CNN reports. Johannesburg will slap a 20 percent tax on those drinks, as South Africa tries to stall a half-century’s worth of increases in soda consumption and reduce an obesity rate that’s among the highest on the continent. South Africans drank an average of 254 sugary sodas in 2010, or almost three times the global average. France, Mexico, Hungary and several U.S. cities (including Philadelphia) have soda taxes.

LABOUR BEING LABOUR: Forget just the prime minister’s tax returns. John McDonnell, the British shadow chancellor, said the Labour Party wants to publicly release the tax returns of any Briton who makes more than 1 million pounds a year (about $1.23 million right now). McDonnell said Labour got the inspiration for that proposal from Norway and Sweden, and that it would firm up trust in the U.K.’s tax system, the BBC reported. And finally: The shadow chancellor seemed to break with Jeremy Corbyn, the Labour leader, in saying he supported setting aside a specific portion of revenue for the National Health Service.

STATE NEWS —

DAKOTA WINDFALL? There’s certainly been no lack of controversy surrounding the Dakota Access oil pipeline, but a new Associated Press examination found that the project could also bring North Dakota an extra $110 million a year in tax revenue. That’s more than three times as much as the state has been paying to guard a pipeline site that’s hosted its share of protests recently. The AP projects that the pipeline would spur around $10 million in new property taxes, in addition to $100 million in new oil revenue — which would be needed revenue for a state that saw its budget take a hit because of declining energy prices.

WHITHER UBER? The Georgia House is considering whether to throw a 4 percent sales tax on trips with ride-sharing apps like Uber and Lyft — and that’s got Uber up in arms, the Atlanta Journal-Constitution reports. The measure cleared committee this week, and is likely up for a full vote today. If it passes, Georgia would have the second-highest tax rate on those kinds of rides, behind only Rhode Island’s 7 percent. (Most states don’t tax Uber or Lyft rides at all.) Local governments could put their own taxes on the rides, leading Uber to project that rides in Atlanta could get slapped with an almost 9 percent tax.

— Time offers a video primer — with doodles! — on how border adjustability works.

— A Tax Foundation warning: Border adjustments are for taxes, not trade!

DID YOU KNOW?

Members of the Caterpillar Club — including former President George H.W. Bush — have used a parachute to escape a failing aircraft.

** A message from the Secure Family Coalition: Life insurance companies and their financial advisors offer financial security to families precisely when they most need it. Widespread use of the products they provide, which include employer-based retirement plans, annuities and IRAs, help people prepare for retirement. Along with life insurance, long-term care and disability income insurance, these products comprise the private sector safety net that 75 million American families rely on. Protect the financial safety net as part of tax reform. Learn more at SecureFamily.org. **

About The Author

Bernie Becker is a tax reporter for POLITICO Pro, where he is primarily responsible for writing the Morning Tax tipsheet.

He previously covered taxes for The Hill, and was an editorial assistant for The New York Times in Washington.

A native of Martinsville, Va., Becker has degrees from the College of William and Mary and the University of Maryland. He now lives in Northwest D.C. with his wife and young daughter. His hobbies include running, reading history books, eating spicy food and watching his daughter chase his cat.